Fuentes & Hubbard
[2023] FedCFamC1F 957
•14 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fuentes & Hubbard [2023] FedCFamC1F 957
File number(s): SYC 9183 of 2020 Judgment of: ALTOBELLI J Date of judgment: 14 November 2023 Catchwords: FAMILY LAW – PROPERTY – Where the husband made a greater financial contribution, but the wife has greater future needs – Where there is a 10 per cent adjustment in favour of the wife for future needs – Overall 50:50 property split. Legislation: Family Law Act 1975 (Cth) ss 75, 79, 117 Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Gosper & Gosper (1987) FLC 91-818; [1987] FamCA 43
Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395
In the Marriage of Quinn (1979) FLC 90-677; [1979] FamCA 86
Speller v Chong [2003] NZFLR 385
Suffolk v Suffolk [2007] FamCA 797
Division: Division 1 First Instance Number of paragraphs: 57 Date of hearing: 18–22 September 2023 Place: Sydney Counsel for the Applicant: Mr Batey Solicitor for the Applicant: Di Lizio & Associates Counsel for the Respondent: Ms Lawson Solicitor for the Respondent: KMJ Family Law Solicitor for the Independent Children's Lawyer: Holmes Donnelly & Co Solicitors
Table of Corrections 23 November 2023 In paragraph 52 the division of property was amended so that the wife will receive an additional payment from the husband of $199,326. 23 November 2023 In paragraph 57 the amount that each party needs to pay the Legal Aid Commission of NSW for the costs of the Independent Children’s Lawyer was amended such that $4,441.25 be paid by the husband and $6,091.25 be paid by the wife, instead of $6,710 each. A sentence was added noting that there is no longer the requirement for the parties to pay the fees of Dr B. ORDERS
SYC 9183 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR FUENTES
Applicant
AND: MS HUBBARD
Respondent
INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
14 NOVEMBER 2023
Amended pursuant to r 10.13(e) and (h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 on 23 November 2023
THE COURT ORDERS THAT:
1.Within seven days of the date of these orders, the parties do all things necessary to instruct the Applicant’s solicitor to transfer the balance of the controlled trust account held by Di Lizio & Associates on behalf of the parties as follows:
(a)The sum of $389,288.79 into a bank account nominated by the Respondent; and
(b)The balance into a bank account nominated by the Applicant.
2.Within seven days of the date of these orders, the Applicant pay the sum of $199,326 into a bank account nominated by the Respondent.
3.Each party shall otherwise retain all property of whatsoever nature and kind held in that party’s name, possession, or control as at the date of these orders.
4.Each party shall indemnify the other and keep the other indemnified for all time in relation to their own liabilities.
5.Within 30 days of the date of these orders, the Applicant is to pay $4,441.25 and the Respondent is to pay $6,091.25
each party is to payto the Legal Aid Commission of New South Walesthe sum of $6,710for the costs of the Independent Children’s Lawyer.
6.Within 30 days of the date of these orders, each party is to pay to the single expert, Dr B the sum of $783.75 for her fees for reading and attendance.7.Leave is granted to the parties to apply to relist the proceedings on 14 days’ notice to deal with any interpretation, implementation and/or enforcement of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fuentes & Hubbard has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Amended pursuant to r 10.14 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 on 23 November 2023
ALTOBELLI J:
INTRODUCTION
These reasons for judgment explain the orders that the Court has made in relation to an application for the alteration of property interests of the parties in this matter.
BACKGROUND
Mr Fuentes (“the husband”) is the applicant in this matter and is 37 years old. He is currently employed on a full-time basis however his contract will expire in late 2023. Ms Hubbard (“the wife”) is the respondent and is 36 years of age. She is a qualified allied health professional but has been out of the workforce since the birth of the child of the relationship, X born 2019 .
The parties married and commenced cohabitation in 2017. They separated on 19 November 2019 and divorced in 2021. Neither party has re-partnered. Up until the final hearing, X lived with the wife and spent time with the husband each alternate weekend from 8.30 am on Saturday to 3.30 pm on Sunday, and each alternate Thursday from 1.30 pm to 4.30 pm.
This matter came before me for final hearing for five days between 18 and 22 September 2023. Both parenting and property proceedings were originally listed but final parenting orders were made by consent on the final day of the hearing. Those orders provide for the parties to have equal shared parental responsibility for X, and for X to live with the wife and spend gradually increasing time with the husband from three nights per fortnight in 2023, to five block nights per fortnight once X starts high school. Further partial property consent orders were also made on the final day of the hearing, finalising the wife’s Application in a Proceeding filed 11 September 2023. The parties agreed for each of them to receive $120,000 from the net proceeds of sale from the property at C Street, Suburb D NSW (“the Suburb D property”) held in trust by the husband’s solicitors.
Both parties were represented by experienced counsel, and the Independent Children’s Lawyer was excused after consent orders were made on the final day of the hearing. All the parties and their lawyers were, quite appropriately, focussed on the parenting issues in the case. The settlement of that part of the case was both child-focused and commendable. Regrettably comparatively little time was focussed on the financial issues, and thus this part of the case was rushed.
COMPETING PROPOSALS
In his Amended Initiating Application filed 3 March 2023 the husband sought for the net proceeds from the sale of the Suburb D property to be apportioned as to 70 per cent to himself and 30 per cent to the wife. He otherwise sought for each party to be solely entitled to all other property, money and superannuation in their possession. However, by closing submissions the husband proposed that there should be an overall adjustment as to 55 or 56 per cent to the husband and 45 or 44 per cent to the wife.
In her amended Minute of Order received on the final day of hearing, the mother proposed that the net proceeds of sale from the Suburb D property be apportioned as to $226,000 to the husband and the balance to the wife, and in her Case Outline filed 12 September 2023 and during closing submissions the wife proposed that there be a 15 per cent adjustment for future needs. She otherwise proposed that each party retain all property held in their name, possession and control. The Court estimates that this would give her about 61 per cent of the total net property pool.
EVIDENCE BEFORE THE COURT
In support of his case, the husband relied upon the following material:
(a)Case Outline filed 15 September 2023;
(b)Amended Initiating Application filed 3 March 2023;
(c)His affidavit filed 3 March 2023;
(d)His affidavit filed 17 April 2023;
(e)His affidavit filed 23 August 2023;
(f)Affidavit of Ms E filed 2 March 2023;
(g)Financial Statement filed 3 March 2023; and
(h)Various documents tendered during the proceedings and marked as Exhibits A1–A7.
In support of her case the wife relied upon the following material:
(a)Case Outline filed 12 September 2023;
(b)Amended Response filed 2 March 2023;
(c)Her affidavit (property) filed 2 March 2023;
(d)Affidavit of Ms F filed 2 March 2023;
(e)Financial Statement filed 2 March 2023; and
(f)Various documents tendered during the proceedings and marked as Exhibits R1–R7,
The husband and the wife were both cross-examined, as well as the husband’s mother, Ms E, and the wife’s mother, Ms F.
APPLICABLE LAW
This is an application under s 79 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides:
79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Section 79(4) incorporates the provisions contained in s 75(2) of the Act, which states:
(2) The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i)a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Bevan & Bevan (2013) FLC 93-545 (“Bevan”), the Full Court considered the High Court’s decision in Stanford v Stanford (2012) 247 CLR 108, which provided guidance on how s 79 was to be interpreted and implemented. Bevan endorsed the continuing application of the four‑step approach articulated by the Full Court in Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 (“Hickey”), but on the basis that it is a shorthand distillation of the words of s 79, as opposed to being a statutory edict. The four steps articulated in Hickey at [39] are:
(1)Identify and value the property, liabilities and financial resources of the parties;
(2)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property;
(3)Identify and assess the other facts relevant under s 79(4)(d)–(g) including s 75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
(4)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
THE BALANCE SHEET
At the commencement of the hearing the Court was provided with a document entitled “Joint Balance Sheet”. This was subsequently amended and is reproduced as follows:
# Owned Description (values at March 2023 financial statements except funds in controlled monies trust being the only asset to be adjusted) Husband’s value Wife’s value ASSETS 1 H G Street, Suburb H NSW (95%) $750,000 $750,000 2 H CBA account …91 at 13.09.2023 $157,972 $157,972 3 H Westpac …69 at 3.3.2023 $2,009 $2,009 4 H Westpac …77 at 31.8.23 $212,469 212,469 5 J ANZ …45 joint with Ms E 50% at 30.7.23 $136,847 $136,847 6 J General household contents $5,000 $5,000 7 H Insurance policy $44,950 $44,950 8 W J Street, Suburb K NSW E$800,000 E$800,000 W CBA account …16 at 12.9.23 $1,642 $1,642 9 W Westpac account …22 at 12.9.23 $9,438 $9,438 11 J Proceeds from Sale of Suburb D (not including interim payments, added back below) $398,652 $398,652 Total $2,519,051 $2,519,051
ADDBACKS 13 Withdrawal from Joint offset account by wife on 16 October 2019 (Westpac Ace no. …75) for payment of wife's company tax bill (L Pty Ltd) $3,052 (see note) 14 Withdrawal from Joint offset account by wife on 20 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2019 and FY 2020 $1,386 (see note) 15 Withdrawal from Joint offset account by wife on 16 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2018. $1,727 (see note) 16 Withdrawal from Joint offset account by wife on 16 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2017 $2,893 (see note) 17 Withdrawal from Joint offset account by wife on 19 November 2019 (Westpac Ace no. …75) $103,000 (see note) 18 Withdrawal from Joint offset account by wife on 19 November 2019 (Westpac Ace no. …75) $9,090 (see note) 19 Jan/Feb 2022 Interim payments of $78,272 to each party $156,544 $156,544 20 Capital Gains tax paid by husband in March 2023 ($53,182) ($53,182) 21 Orders of 22 Sep 2023 interim payments of $120,000 to each $240,000 $240,000 Total $464,510 $343,362
LIABILITIES 21 H Mortgage - G Street, Suburb H NSW $246,525 $246,525 22 H ANZ Bank Credit Card $1,850 NIL (see note) 23 H Loan from mother $391,000 NIL (see note) 24 W Westpac investment loan acc …63, at 12.9.23 $274,435 $274,435 25 W Westpac investment acc …55 at March 2023 $97,033 $97,033 26 W CGT liability payable by wife $39,513 $44,946 Total $1,048,506 $662,939 SUPERANNUATION M Name of fund Type of interest Husband’s value Wife’s value 27 H Superannuation Fund 1 at 30.6.2023 Accumulation $128,781 $128,781 28 W Superannuation Fund 2 at 12.9.23 Accumulation $18,737 $18,737 Total superannuation $147,518 $147,518 TOTAL NET PROPERTY (including super and addbacks) Total $2,082,537 $2,346,992
The values of the assets at items 1–11 are agreed. However, the Court notes that the total assets had been calculated incorrectly as $2,519,051 and should in fact be 2,518,979, which is reflected below. The Court further notes that an item number was missing, and item 10 was skipped, which has been rectified below by labelling the blank space as item 9 and amending the previous item 9 to be item 10.
The wife contends that the addbacks at items 13–16 should not be added back because it was reasonable and agreed by the parties that the wife’s tax for the 2019 financial year and accounting expenses were to be paid from joint funds, because the wife was on maternity leave and X was an infant. During cross-examination the husband’s counsel put to the wife that these items are referrable to tax returns and accountants’ fees up to 2016, prior to cohabitation. The wife explained that although her company closed in 2018 before the parties married, she did not complete her tax return until 2019 because she had to keep the business running as she was still receiving money from her company, such as late payments to practitioners. The wife’s contention is plausible. This means that her pre-cohabitation business produced income post‑cohabitation, and that the expenses in question were incurred in deriving that income. Doing the best it can with the limited evidence, the Court declines to allow the contended addbacks.
The wife contends that item 17 should not be added back because she was simply withdrawing a sum of money from the joint offset account which she had previously deposited from her separate savings account on 23 September 2019 (Exhibit R1). She alleges that the husband similarly withdrew an amount of $220,000 from the joint offset account which he had previously deposited from his separate savings on 23 May 2019 (Exhibit R1). During cross‑examination, the husband agreed that the wife deposited $103,000 into the account on 23 September 2019 but said he was not sure whether it was “pre-marriage savings” or not. He also agreed that he withdrew the amount of $220,000 on 17 July 2019, but said that this was from his “pre-marriage savings”.
During closing submissions, counsel for the husband asserted that the husband had re-deposited the amount he had withdrawn and submitted that the wife’s withdrawal was possibly put towards legal fees and also constituted “her own discretionary expenditure” which was “used for her own benefit” (Transcript of 22 September 2023 p. 39 lines 15–22). Counsel argued that if most of the money was spent on legal fees it should be added back because she used joint property for her own benefit or, alternatively, if it was spent on living expenses it should reduce her post-separation contribution.
Counsel for the wife submitted that the husband similarly used joint assets to pay his legal fees (to which he agreed during cross-examination), and that the wife’s withdrawal did not relate to discretionary expenditure, and instead that she applied the funds “for her existence and survival, and similarly, the existence and survival of the child” (Transcript of 22 September 2023, p. 41 lines 29–30).
There is no evidence before the Court to indicate that the sum the mother deposited and withdrew came from anywhere other than her “pre-marriage savings”, and in any event she applied the funds for the benefit of the family in circumstances where the husband had not paid child support for two and a half years. Moreover, there is no evidence to support the contention that the money was applied towards legal costs. Thus, the amount at item 17 will not be added back and will be nil on the balance sheet.
In the notes to the joint balance sheet, the wife concedes that she withdrew the amount at item 18 from the joint offset account on 19 November 2019 after calculating that sum as her share, however she also contends that the husband withdrew $20,000 in cash (two withdrawals of $10,000 on 21 and 22 November 2019, Exhibit R1) which he does not propose adding back. During cross-examination the husband agreed that he had made those withdrawals and conceded this is more than what the wife withdrew. The Court finds that the amount at item 18 should be added back, as well as the amount of $20,000 that the husband withdrew over two transactions on 21 and 22 November 2019. This will be treated as item 18A.
The addbacks at items 19–20A are agreed. The Court notes that below it has labelled the addback at item 21 as 20A to avoid confusion with the liability labelled as item 21.
Nothing was said in submissions about item 20, Capital Gains Tax (“CGT”) already paid by the husband on his share of the profits from the sale of the jointly owned Suburb D property. There was no explanation as to why the amount of CGT paid, $53,182, is in brackets thus (conventionally) signalling that it is a liability. The figure is agreed. Doing the best the Court can on the evidence, the liability was paid out of joint funds in the sense that if the liability had not been paid, the funds would have appeared on the balance sheet. Of course, so too would the liability appear on the balance sheet. Given that the husband’s CGT debt is a legitimate joint liability (as is that of the wife), it is inappropriate to add it back in circumstances where there is no off-setting liability. It is thus just and equitable to ignore item 20. Joint funds were used to pay a joint debt.
The mortgage liability at item 21 is not in dispute.
The wife disagrees with the husband’s liability at item 22 claiming that post-separation personal expenses should not be included in the property pool. The Court agrees. There was little to no evidence regarding this item and it will be nil on the balance sheet.
Item 23 is a contentious issue as the husband claims that the sum of $391,000 is a loan from his mother, Ms E, while the wife claims that the sum was a gift to the parties.
During cross-examination the husband conceded that there are no documents setting out the terms of the purported loan, however he disagreed that the sum was a gift or that there was no expectation that he had to pay the sum back. He stated “I have no right to use those funds as I wish” and “I need to discuss with [Ms E] first before using those funds” (Transcript of 20 September 2023 p. 19 lines 26–30).
During cross-examination Ms E also asserted that the loan to the husband was made pursuant to an oral agreement and that in her culture they do not sign written agreements for loans. She explained the husband would need to return the money to her when she needed it and that she had asked the husband to return the money to pay for medical fees when her mother was terminally ill, although this did not eventuate because her mother passed away. The Court notes that this was not in Ms E’s affidavit, but it was reiterated by the husband during cross‑examination.
A difficulty in the evidence of Ms E is that she deposes in her affidavit filed 2 March 2023 at paragraph 11 that she never discussed whether her financial assistance to the husband was to be as a loan, explaining that in their Country M culture “…it was natural to assist my son financially”, which she reiterated during cross-examination (Transcript of 19 September 2023, p. 67 line 40 to p. 68 line 2). The Court finds that any later statement made by her, or the husband, in cross-examination is fundamentally inconsistent with her affidavit. Any natural or cultural propensity to financially assist one’s adult child cannot, of itself, necessarily mean there was an obligation to repay in the same manner as a loan is repaid. If she intended it to be a loan she could have said so. The generosity of Ms E is just as referable to it being a gift, as the wife contends. Indeed, the Court finds that to be the more plausible outcome in this case. This is consistent with the husband’s evidence that he needed to discuss how moneys provided were to be used. Consultation is not the same as seeking approval.
Item 23 will read nil. The funds provided by the Ms E will be treated as a gift and, on the evidence in this case, a financial contribution made by him.
The CGT payable by the wife at item 26 is also in issue as to quantum. She contends for a higher liability than does the husband. The wife appeared to be confused during cross‑examination when asked questions about this, however her counsel sought to clarify the evidence in closing submissions. The wife’s counsel explained that the wife’s total tax payable was $48,786.37 (PAYG tax plus CGT), from which must be deducted $3,839.88 (PAYG tax), thus resulting in CGT payable of $44,946.49 (based on Exhibits R3 and R6). The husband’s counsel continued to assert that the amount of CGT payable by the wife was $39,513.58 (based on Exhibit A7).
The best evidence about this is Exhibit A7, a business record of the wife’s own accountant. Exhibits R3 and R6 are not transparent in the sense that it is not possible for a lay person to deduce how the contended figure is calculated. The CGT liability at item 26 will be $39,513.58.
Noting the above findings, the balance sheet will be as follows:
ASSETS No Ownership Description Value 1 H G Street, Suburb H NSW (95%) $750,000 2 H CBA account …91 at 13.09.2023 $157,972 3 H Westpac …69 at 3.3.2023 $2,009 4 H Westpac …77 at 31.8.23 $212,469 5 H ANZ …45 joint with Ms E 50% at 30.7.23 $136,847 6 J General household contents $5,000 7 H Insurance policy $44,950 8 W J Street, Suburb K NSW E$800,000 9 W CBA account …16 at 12.9.23 $1,642 10 W Westpac account …22 at 12.9.23 $9,438 11 J Proceeds from Sale of Suburb D (not including interim payments, added back below) $398,652 TOTAL $2,518,979 ADDBACKS No Ownership Description Value 13 W Withdrawal from Joint offset account by wife on 16 October 2019 (Westpac Ace no. …75) for payment of wife's company tax bill (L Pty Ltd) NIL 14 W Withdrawal from Joint offset account by wife on 20 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2019 and FY 2020 NIL 15 W Withdrawal from Joint offset account by wife on 16 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2018. NIL 16 W Withdrawal from Joint offset account by wife on 16 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2017 NIL 17 W Withdrawal from Joint offset account by wife on 19 November 2019 (Westpac Ace no. …75) NIL 18 W Withdrawal from Joint offset account by wife on 19 November 2019 (Westpac Ace no. …75) $9,090 18A H Withdrawal from Joint offset account by husband on 21 and 22 November 2019 (Westpac Ace no. …75) $20,000 19 J Jan/Feb 2022 Interim payments of $78,272 to each party $156,544 20 H Capital Gains tax paid by husband in March 2023 NIL 20A J Orders of 22 Sep 2023 interim payments of $120,000 to each $240,000 TOTAL $425,634 LIABILITIES No Ownership Description Value 21 H Mortgage – G Street, Suburb H NSW $246,525 22 H ANZ Bank Credit Card NIL 23 H Loan from mother NIL 24 W Westpac investment loan acc …63, at 12.9.23 $274,435 25 W Westpac investment acc …55 at March 2023 $97,033 26 W CGT liability payable by wife $39,513.58 TOTAL $657,506.58 SUPERANNUATION No Member Name of Fund Type of Interest Value 27 H Superannuation Fund 1 at 30.6.2023 Accumulation $128,781 28 W Superannuation Fund 2 at 12.9.23 Accumulation $18,737 TOTAL $147,518 TOTAL NET PROPERTY (including superannuation and addbacks) 2,434,624.42 ASSESSMENT OF CONTRIBUTION
Both counsel indicated that they relied on their written submissions contained in their case outlines, and also made brief oral submissions.
This was a very short relationship, lasting only approximately two years. Where cohabitation has only lasted for a short period, the Court is more likely to decide that “the contributions of the parties of their property should not be regarded as equal”, but there is no “formula or special rule to be applied in such cases” (Grant Riethmuller and Robin Smith, Family Law (Thomson Reuters, 7th edition, 2022) 798). However, it is often appropriate for the Court to examine the respective contributions of both parties to a marriage more closely in the case of a comparatively short period of cohabitation than in the case of a longer period (In the Marriage of Quinn (1979) FLC 90-677 at 78,613–78,615, 78,617), and “the impact of initial contributions may be seen as more significant when weighed against other contributions” in a short marriage (Suffolk v Suffolk [2007] FamCA 797 at [104]).
Counsel for the husband suggested during closing submissions that “[i]t’s not for the Court to go back and pick over the entrails of a three-year marriage to try and compare intangible contributions with tangible contributions” (Transcript of 22 September 2023, p. 36 lines 43‑45).
In his Case Outline filed 15 September 2023, the husband proposed that his contribution-based entitlements should be no less than 65 per cent, although during closing submissions counsel for the husband stated this should be 55 to 60 per cent. The husband submitted that as at cohabitation he owned a 95 per cent share of a property in Suburb H NSW, as well as funds amounting to $800,000, whilst the wife was in possession of a property in Suburb K NSW and funds of approximately $125,000 (husband’s affidavit filed 3 March 2023, paragraphs 44–45). As the Court has found the $391,000 given to the husband by Ms E was a gift this will be treated as a contribution by him (Gosper & Gosper (1987) FLC 91-818).
During closing submissions counsel for the husband acknowledged that the parties’ contributions as at cohabitation were “more or less on par” (Transcript of 22 September 2023, p. 36 line 36). To be fair, however, this submission was predicated on the amount of $391,000 from Ms E being treated as a loan, not a gift. For reasons given, the Court finds otherwise. At the time of submissions, counsel for the husband was unaware of this. Any submissions made by him will thus needed to be interpreted through this lens.
The husband submitted that during the relationship he continued to work and provide financially for the family, and that he also assisted the wife with housework and the care of X, including taking leave to support the wife before and after the birth, and attending appointments. During the relationship the parties jointly purchased the Suburb D property, to which the husband asserts he contributed $125,715 from his pre-marriage savings, and $70,091 from the funds he had saved during cohabitation, and the wife contributed $79,722 (husband’s affidavit filed 3 March 2023, paragraph 47).
On the basis that the funds from Ms E were a gift, the husband’s financial contribution is contended to be greater than that of the wife. In other respects, however, and although it could have been expressed more clearly, it was implied that his other cumulative contributions were equivalent to that of the wife during the marriage.
Post-separation, the husband has paid child support currently at the rate of $1,517.58 per month (although he did not pay this for the first two years), supervision fees of $16,700 (which he believes were unnecessary) and has met all the expenses for the Suburb D property including $13,000 on mortgage repayments, rates and taxes (husband’s affidavit filed 3 March 2023, paragraph 49). During closing submissions counsel for the husband submitted that the husband has been denied the opportunity to make homemaking and parenting contributions post‑separation because of the wife’s actions and orders of this Court. Nevertheless, counsel for the husband acknowledged that the wife’s post-separation contributions “dwarfed” the husband’s post-separation contributions (Transcript of 22 September 2023, p. 37 line 43).
Counsel for the husband contended that, as at the hearing, the husband’s contribution remained greater than that of the wife.
In her Case Outline filed 12 September 2023, the wife proposed that contribution should be assessed as to 55 per cent to the husband and 45 per cent to herself. The wife submitted that each party owned real property at the commencement of cohabitation, with the husband’s property being valued at approximately $700,000 and the wife’s property being valued at approximately $800,000. She conceded that the husband made a greater financial contribution to the purchase of the Suburb D property by paying the deposit of $113,000 from his pre‑marriage savings, and $13,000 more than the wife to the balance of the purchase cost. As the total paid by the parties for the purchase of the Suburb D property was $1,179,435, the wife accepted that the husband contributed 11 per cent more than her to the purchase of the property. However, she also submitted that throughout the relationship she was wholly responsible for domestic duties, that the parties contributed equally to joint living expenses until the child was born, and that she was and remains a full-time stay-at-home parent which has impacted her ability to accumulate superannuation.
It appears to be common ground that the contributions of both parties as at cohabitation were commensurate, save for the father’s contribution in the form of what the Court has found to be a gift from Ms E. While it appears the husband made a greater financial contribution during the relationship, the wife took on a greater share of domestic duties and childcare, as she continued to look after X and did not return to work after her birth. The same can be said for the post-separation period. Nonetheless, particularly considering the gift of funds from Ms E, the husband’s contribution will be assessed at 60 per cent. The Court observes that the mere fact that this was a relatively short relationship does not necessarily exclude the application of a holistic approach to the assessment of contribution.
ASSESSMENT OF FUTURE NEEDS
In his Case Outline filed 15 September 2023, the husband proposed that there be no more than a five per cent adjustment in the wife’s favour based on future needs, although in closing submissions counsel for the husband indicated there could be a five to 10 per cent adjustment. The husband submitted that both parties are the same age and in good health, and both have the capacity to gain employment with negligible income earning disparity. During closing submissions counsel for the husband acknowledged that the husband presently has a greater income, and the mother will not have the same income earning capacity while she is looking after X. However, he submitted that the mother’s income earning capacity will increase once she obtains the academic qualifications she is pursuing, which the wife advised would be completed by early 2024.
Both parties will also maintain a place of residence and a reasonable standard of living. The husband further submitted that he currently pays the wife $1,517.58 per month in child support and will continue to pay child support as assessed by the Child Support Agency. During closing submissions counsel for the husband acknowledged that the wife will have the primary care of X, at least in the next few years. Counsel concluded that a five or six per cent adjustment should be made in favour of the wife, but shortly after implied this should be four or five per cent, which, the Court notes, differs from what counsel earlier had said should be a five to ten per cent adjustment.
In her Case Outline filed 12 September 2023, the wife proposed that there be a 15 per cent adjustment in favour of herself based on future needs. The wife submitted that the husband has substantially greater financial resources totalling $1,126,739 including cash of approximately $580,000. In comparison, the wife has financial resources totalling $44,863 including cash of approximately $22,500. The husband also has a greater income earning capacity than the wife, being approximately $160,000 compared to approximately $80,000, especially since the wife has not worked for four years. The wife further submitted that she will continue to be the primary carer for X, will continue to be a stay-at-home parent until X starts school, and will thereafter work part-time to be available to care for X before and after school. During closing submissions, counsel for the wife submitted that there is no evidence about the wife’s future earning capacity, nor her net income prior to the birth of X.
Pursuant to consent orders made on 22 September 2023, the wife will continue to have the primary care of X, with X to spend time with the husband for three nights per fortnight until Term 3 2024, four nights per fortnight until she commences high school, and thereafter five‑night fortnightly blocks. The Court agrees with both parties that at least in the short and medium-term, while the mother remains a stay-at-home parent and thereafter works part-time, the husband will have a greater income earning capacity than the wife. However, the wife indicates that once she returns to work part-time as an allied health professional in mid-2024, her income is likely to be $85,000 to $90,000 (wife’s affidavit filed 2 March 2023, paragraph 51). The husband will also continue to pay child support as assessed. In all the circumstances, the Court assesses the wife’s future needs at 10 per cent.
A JUST AND EQUITABLE ORDER?
It is noted by the Court, and acknowledged by counsel for both parties, that there was a great deal of attention paid to the parenting proceedings in comparison to the property proceedings. Nevertheless, the Court has done the best it can with the evidence before it to formulate a just and equitable order. A final order altering property interests as to 50:50 is proposed.
If each party were to retain all of the property, money and superannuation in their possession, the husband would have $1,606,601 or 66 per cent of the total net property pool, and the wife would have $828,023.42 or 34 per cent of the total net property pool.
The above is outlined in the following table:
HUSBAND WIFE ASSETS Description Value Description Value 1 G Street, Suburb H NSW (95%) $750,000 2 CBA account …91 at 13.09.2023 $157,972 3 Westpac …69 at 3.3.2023 $2,009 4 Westpac …77 at 31.8.23 $212,469 5 ANZ …45 joint with Ms E 50% at 30.7.23 $136,847 6 General household contents $2,500 General household contents $2,500 7 Insurance policy $44,950 8 J Street, Suburb K NSW $800,000 9 CBA account …16 at 12.9.23 $1,642 10 Westpac account …22 at 12.9.23 $9,438 11 Proceeds from Sale of Suburb D (not including interim payments, added back below) $199,326 Proceeds from Sale of Suburb D (not including interim payments, added back below) $199,326 Total $1,506,073 Total $1,012,906 ADDBACKS 13 Withdrawal from Joint offset account by wife on 16 October 2019 (Westpac Ace no. …75) for payment of wife's company tax bill (L Pty Ltd) NIL 14 Withdrawal from Joint offset account by wife on 20 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2019 and FY 2020 NIL 15 Withdrawal from Joint offset account by wife on 16 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2018. NIL 16 Withdrawal from Joint offset account by wife on 16 September 2019 (Westpac Ace no. …75) for payment Accountant's fees for (L Pty Ltd) FY 2017 NIL 17 Withdrawal from Joint offset account by wife on 19 November 2019 (Westpac Ace no. …75) NIL 18 Withdrawal from Joint offset account by wife on 19 November 2019 (Westpac Ace no. …75) $9,090 18A Withdrawal from Joint offset account by husband on 21 and 22 November 2019 (Westpac Ace no. …75) $20,000 19 Jan/Feb 2022 Interim payments of $78,272 to each party $78,272 Jan/Feb 2022 Interim payments of $78,272 to each party $78,272 20 Capital Gains tax paid by husband in March 2023 NIL 20A Orders of 22 Sep 2023 interim payments of $120,000 to each $120,000 Orders of 22 Sep 2023 interim payments of $120,000 to each $120,000 Total $218,272 Total $207,362 LIABILITIES 21 Mortgage – G Street, Suburb H NSW $246,525 22 ANZ Bank Credit Card NIL 23 Loan from mother NIL 24 Westpac investment loan acc …63, at 12.9.23 $274,435 25 Westpac investment acc …55 at March 2023 $97,033 26 CGT liability payable by wife $39,513.58 Total $246,525 Total $410,981.58 SUPERANNUATION 27 Superannuation Fund 1 at 30.6.2023 $128,781 28 Superannuation Fund 2 at 12.9.23 $18,737 Total $128,781 Total $18,737 Net Total (including superannuation) $1,606,601 Net Total (including superannuation) $828,023.42
Based on the Court’s findings above, each party is to receive $1,217,312.21. Therefore, there needs to be a payment from the husband to the wife of $389,288.79 in order for the parties to achieve an equal split of the matrimonial pool. The Court will order that the wife receive $389,288.79 from the proceeds of sale from the Suburb D property, with the husband to receive the balance, and that the husband pay the wife an additional sum of $199,326. The Court is satisfied to the extent that the evidence permits that the proposed orders are just and equitable to both parties.
COSTS OF THE INDEPENDENT CHILDREN’S LAWYER
On the final day of the hearing the Independent Children’s Lawyer handed up a Minute of Order regarding costs. He proposed that each parent pay to the Legal Aid Commission of New South Wales the sum of $6,710 for the costs of the Independent Children’s Lawyer within 30 days, and that each parent pay to the single expert, Dr B, the sum of $783.75 for her fees for reading and attendance. The mother opposed the proposed costs order, and brief oral submissions were made by the Independent Children’s Lawyer and counsel for the mother.
The Independent Children’s Lawyer submitted that as a matter of public policy, where possible, parents should contribute to the costs of their child’s representation (citing CDJ v VAJ (1998) 197 CLR 172). He stated that each party has filed a costs notice indicating how much they have paid their own lawyers, and that this payment should not take precedence over the public purse. The Court notes that this submission is consistent with s 117(2A)(g), and is clearly relevant.
Counsel for the wife submitted that the Independent Children’s Lawyer made a costs application based on policy, and yet failed to address the Court about s 117(3) of the Act and the discretion the Court has to make costs orders. She stated that it was incumbent on the Independent Children’s Lawyer to address the Court as to why the Court should exercise that discretion, and that the Independent Children’s Lawyer has not satisfied the Court in this regard. The Court disagrees. The submission made was cogent and succinct.
In any event, counsel for the wife reiterated that the wife will remain the primary carer of X and that she has not worked since X’s birth, and there was a period of two and a half years where no child support was paid by the husband. It was further submitted that the wife has a current application before the Court regarding payment to her own lawyers (which, the Court notes, was settled by the making of consent orders providing for payment to both parties of $120,000).
The Court finds in favour of the Independent Children’s Lawyer. The Court notes, referring to s 117(4) of the Act, that neither part has been in receipt of legal aid in respect of the proceedings, and the Court considers that on the basis of the property orders made in this judgment, neither party would suffer financial hardship if they were ordered to bear a proportion of the costs of the Independent Children’s Lawyer. Therefore, each party is to pay costs, however not according to the Independent Children’s Lawyer’s proposal. My chambers received correspondence on 17 November 2023 from the mother’s solicitor who indicated that the Independent Children’s Lawyers costs were different to those stated in his Minute of Order, and further that there were no outstanding fees for Dr B. Therefore, the Court will order that each party is to make a payment to the Legal Aid Commission of New South Wales for the costs of the Independent Children’s Lawyer, with the husband to pay $4,441.25 and the wife to pay $6,091.25.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 14 November 2023
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